ELECTRONICS manufacturer Daiwa Associate Holdings is raising $58.5 million through a public offering, to fund expansion. It is issuing 50 million new shares at $1.17 each, with a prospective price-earnings multiple of 6.3 on a weighted average basis and 7.9 on a fully-diluted basis. The company is forecasting a profit, after taxation and minority interests but before extraordinary items, of at least $28 million for the year ending March 31. The new shares will represent 25 per cent of the group's expanded capital of 200 million shares. Based on the new issue price, the group will have a market capitalisation of $234 million and an adjusted net tangible asset value of 49 cents a share. Had the shares been listed for the whole of this financial year, the directors would have expected to declare dividends of 9.4 cents a share, corresponding to a prospective dividend yield of eight per cent. Shares subscription opens today and closes on Tuesday. The shares are expected to start trading on April 14. Of the net proceeds of about $51.5 million, about $10 million will be used to expand the group's distribution network in China. An equal sum will be spent on the development of a new production base near Fenggang on the mainland. About $13 million will be used to set up a plant to make rectifier diodes, $6 million to launch production of new potentiometer models, and $5 million for the development of consumer electronic product manufacturing. The balance will be used as additional working capital. Managing director Alick Leung Pak-ching and president Herman Lau Tak-wan believe the establishment of a comprehensive sales and distribution network in China would benefit the company. Established in 1985, Daiwa is mainly involved in the design, development, manufacture and distribution of electronic components. Its sales of semi-fixed and variable resistors under the Cosmos brand name in the seven months to October 31 last year accounted for about 60 per cent of the market share in Hong Kong. Its production facilities are in Dongguan and Zhaoqing employ more than 2,000 people. The company also acts as an electronic component distributor for Toshiba, SGS-Thomson Microelectronics and Sino-American Silicon. It is also a licensed manufacturer of consumer electronic products, which are exported mainly to Japan, Europe and the United States.